Explain the similarities and differences between AT and TCE on corporate governance and criticize AT using TCE’s perspective

Both AT and TCE share considerably the same assumption, they believe that market mechanism will not work all the time because of bounded rationality, opportunism, and moral hazard. The two theories also believe that there is no perfect contract and both rely endogenously on the board of director as a control instrument. Even though AT and TCE both share these similarities, they analyze them from different perspectives. The unit of analysis in AT is individual level, while it is transaction in TCE. The focal cost of AT is the residual loss that causes from bounded rationality, opportunism, and moral hazard, while it is maladaptation of governance structure in TCE. Furthermore, the focal contractual concern of AT is ex ante, while it is ex post in TCE. AT focuses on relationship between principals (shareholders) and agents (CEO). Due to the fact that the principals want to maximize their return, while the agents want to maximize their wealth, power, and prestige, so the interests of the two parties are not aligned. The agents are able to fulfill their interests without necessary fulfilling the principals’. To guard against such bounded rationality, opportunism, and moral hazard from the agent, board of director is appointed to link the imperfect relationship between principals and agents. The board of director has the right to monitor, ramify, and sanction the decision of the agent to fiduciary protect the principals’ interest. Apart from appointing the board of director, nexus of contracts is utilized to provide ex ante incentive alignment and minimize inefficiencies in the contractual structure of the firm that arise form the unaligned interests. TCE focuses on the alignment of the governance structure in order to minimize the transaction cost as much as possible. Its focal contractual concern is ex post...

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...Title: CorporateGovernance
Assignment topic
Option 1
Conduct a review of the governance of your organisation (or one with which you are familiar) in the form of a report to the Chairman (or President) of the Governing Board of Directors. In the brief report use the concepts, tools and techniques learned in this subject to review the structure, process and effectiveness of the governance of the organisation and make recommendations for appropriate improvements.
Executive summary
This report sets out to review corporategovernance at a private company, namely, Paramount Insurance Company. The specific objectives were to identify the relevant codes the organisation follows, why they are important and review the structure, process and effectiveness of the governance of the organisation.
Throughout the report, it was evident from the findings that Paramount although once a successful organisation, had some governance issues that can and should be improved for the best interest of the company and its policyholders.
Finally, several recommendations for improvement of the organisation’s governance were outlined.
Table of contents
Introduction5
Company profile6
Definition of corporate governance7
Composition and criteria at Paramount8
The Chairman and the Chief Executive Officer8
Diversity of board members8
Appointment to the...

...﻿THE HERSHEY COMPANY
The scope of this paper is to analyze the kind of agency problems that emerges between The Hershey Company and their stakeholders and shareholders. To answer this, a review of the company`s board structure and ownership structure was made. Thereafter two specific situations that has occurred in recent times was used as case examples to enlighten the agency problems suggested to emerge by the corporate structure.
Ownership Structure
Whinston and Segal defines ownership as a set of rights and obligations concerning assets (Thomsen and Conyon, 2012, p. 122). The ownership structure, naturally, highly affects the actions of the company. Hershey is a publicly listed company on the New York Stock Exchange. There are two key elements of ownership structure regarding publicly listed companies; ownership concentration and ownership identity. Institutional ownership accounts for 75,89 % of the total share, where 660 institutional holders possess 123 672 496 shares (NASDAQ NYSE, 01.05.2014). Out of these, the biggest shareholder is Hershey Trust Company, who holds a total of 12 513 721 shares. Among other large institutional shareholder you find Vanguard Group Inc. (7 429 090 shares), State Street Corp (6 926 329 shares) and Janus Capital Management LLC (5 554 881 shares). However, as the Hershey Trust Company holds class B stocks, they have the majority voting power (80 %). The Milton Trust Company also needs to approve any...

...WORLDWIDE
AND IT’S CORPORATE GOVERANCE
Hilton Hotels and Resorts is an international chain of full service hotels and resorts and it’s a flagship brand of Hilton Worldwide. The original company was founded by Conrad Hilton and is now owned by Hilton Worldwide. Hilton hotels are owned, managed, or franchised to independent operators by Hilton Worldwide. Hilton Hotels became the first coast-to-coast hotel chain of the United States in 1943. As of 2013, there are now over 540 Hilton branded hotels across the world in 78 countries across six continents.
The Hilton Hotels brand remains one of the company's flagship brands and one of the largest hotel brands in the world. The company places marketing emphasis on both business travel and leisure travel with locations in major city centers, near airports, convention centers, and a number of vacation resorts and leisure-oriented hotels in popular vacation destinations around the world.
Since being founded in 1919, Hilton Worldwide has been a leader in the hospitality industry. Today, Hilton Worldwide remains a beacon of innovation, quality, and success. And it comprehended the importance of corporategovernance and formulated very systematic corporategovernance guidelines. And I have disseminated its corporategovernance in India, United States and United Kingdom.
CORPORATE GOVERANCE AND ITS IMPORTANCE:
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...What is CorporateGovernance? CorporateGovernance is a generic concept, and in most cases it is defined by its objectives. CorporateGovernance can be defined and analyzed by two terms.
The first was introduced by the Organization of economic Corporation and Development (OECD 1999).
OECD defined “CorporateGovernance as a system in which business corporations are directed and controlled. The CorporateGovernance structure specifies the distribution of rights and responsibilities among the different participation of the corporation such as the Board of Directors, Managers, Shareholders, and other Stakeholders and spells out the rules and procedures for making decisions on corporate affairs. By doing this it also, provides the structure through which the company objectives are set, and the means of attaining those objectives and monitoring the performance. According to the OECD definition CorporateGovernance mainly focuses on corporate control, identification of authorities and responsibilities; identifying corporate goals and the proper procedures of attaining such goals and the share of power by all stakeholders and other means necessary”.
The second definition was introduced by the World Bank (WB 2000). World Bank defines Corporate...

...The differencebetween Management and Governance:
Analysis in the context of Small and Medium Enterprises –SMEs.
By Callixte NYILINDEKWE
I. Introduction:
Traditionally, corporategovernance has evolved around the contract theory and agency problem based on separation of ownership and management (Dube, 2011). The benefits of this separation derive from the monitoring by the board of the CEO activity in the interest of shareholders, and generally in the interest of all stakeholders. There is a need here to first know what the agency theory is.
Agency theory relative to corporategovernance assumes a two-tier form of firm control: managers and owners. Agency theory holds that there will be some friction and mistrust between these two groups. The basic structure of the corporation, therefore, is the web of contractual relations among different interest groups with a stake in the company (Johnson, 2011).
It is generally recognized that most of Small and Medium Enterprises are characterized by lack of separation between ownership and management. The present paper will investigate the issue of corporategovernance in SMEs. Specifically we will try to find out how SMEs would implement good corporategovernance principles.
II. What is Management?
Management has been defined...

...﻿
The Royal Bank of Scotland Case
Nicole Kraemer (413991)
The rise and fall of the Royal Bank of Scotland is characterized by poor corporategovernance which allowed for the complete dominance of the executive management over the board of directors and a massive principal-agent problem. Positive social dynamics and the power of weak ties allowed for compliance while intimidation and bullying tactics silenced questions, concerns and opposition. The board’s utter compliancy and borderline negligence enabled rampant, unchecked empire-building at the cost of shareholder value and led to a spiral of unaccountability and gross incompetence. Stakeholders’ loss of confidence from misinformation and misdirection was an inevitability that sealed RBS’s fate.
The Royal Bank of Scotland (RBS) Group is a publicly traded firm that began its ascension as a global banking entity under the leadership of Sir George Mathewson1. In 2000 RBS was able to secure a hostile of the National Westminster Bank2,3 leading Mathewson to seek a successor to lead the integration of NatWest. He found one in his then-deputy CEO Fred Goodwin.
There are two main corporategovernance issues associated with this turnover in leadership. First of all, the issue of succession. The board is responsible for appointing the CEO4, yet it is obvious Mathewson had significant influence in the decision5. The board exists to avoid principal-agent problems and appointing...

...Title
CorporateGovernance
Assignment Topic
Governance at the St. Lucia Electricity Services Limited
Executive Summary
This report was written to the Chairman of the St. Lucia Electricity Services Limited – Mr. Trevor A. Byer.
St. Lucia Electricity Services Ltd principal activities consist of the generation, transmission and distribution of electricity. This The Company has been the sole commercial supplier of electrical energy in Saint Lucia. On August 11, 1994 the Company changed status to a Public Company, being replaced by the Electricity Supply Act No. 10 of 1994. Profitability and shareholder value became new words in the vocabulary of operations and the motto was changed to ‘Excellence and profitability in Operations’.
A SWOT Analysis was conducted, and the findings are highlighted; along with the importance of the Board of Directors. LUCELEC have six (6) different committees but, three (3) of them were highlighted. Recommendations were made for effective Governance at the organization.
Table of Contents
Topics Page
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Executive Summary...

...﻿EFFECTIVE CORPORATEGOVERNANCE
Presented by:
Alfesany Ahmed
Complience Manager
Pret A Manger Ltd.
Birmingham, UK
Contents
Introduction
CorporateGovernance
The importance of responsible Corporategovernance
The regulatory requirements that shapes the effective corporategovernance in regulated company
The impact of regulatory requirements on pret A manger stakeholders interests
Conclusion
Reference
Pret a Manger was opened in Hampsted, London, UK in 1984 by Jeffrey Hyman.
The Pret A Manger is UK based international fast food chain organization which operates its business worldwide mostly in the UK, the USA, Hong Kong and in France.
This is considered as one of the mainly huge fast food provider in the planet.
The food is free from chemicals which organization makes handmade foods, stabilizer and preservatives.
Revenue of £17.32 million, return on sales of £3.1 million and 16% supply chain increased.
CorporateGovernance
The framework of rules and practices by which a board of directors ensures accountability, fairness, and transparency in a company's relationship with its all stakeholders (financiers, customers, management, employees, government, and the community).
Corporategovernance has also been defined as "a system of law and sound approaches by...

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